FedEx to buy rival parcel delivery firm TNT Express

US parcel delivery firm FedEx is it to buy its Dutch rival TNT Express for 4.4 billion euros, as the courier company looks to expand its European operations.

In a joint statement, the companies said both management boards had reached a "conditional agreement", adding that FedEx has offered shareholders 8 euros per share, which represents a 33 percent premium on TNT's closing share price on April 2.

The all-cash deal comes just two years after European regulators blocked a takeover of TNT by United Parcel Service, due to concerns it would stifle competition and increase prices, but due to FedEx’s strong air fleet, analysts and executives at both firms are stating that FedEx’s partnership would be complementary as TNT has a sizeable European road network.

“We are far more complementary than what was the case with UPS. This means that the synergies will be less,” explained Antony Burgmans, TNT’s chairman at the news conference. “But, on the other hand, the strategic fit is better.”

David J. Bronczek, the president and chief executive of FedEx added: “We know that there are two strong players in the marketplace. Now there will be three. At the end of the day, what the commission and what the regulatory authorities would like to see is better competition.”

FedEx agrees to acquire TNT Express in 4.4 billion euro deal

FedEx and TNT Express anticipate that the deal will be completed in the first half of next year, and the statement adds that they are confident that “anti-trust” concerns can be addressed and overcome during this time.

The combined European regional headquarter for the two companies will be TNT’s base in Amsterdam/Hoofddorp, and the statement adds that that FedEx has promised to maintain the TNT Express brand "for an appropriate period". FedEx has also promised to “strength” the company with “investment capacity, sector expertise and global scope” as it pushes forward with its European expansion.

Frederick W. Smith, chairman and CEO of FedEx Corp., said: “We believe that this strategic acquisition will add significant value for FedEx shareowners, team members and customers around the globe. This transaction allows us to quickly broaden our portfolio of international transportation solutions to take advantage of market trends – especially the continuing growth of global e-commerce – and positions FedEx for greater long-term profitable growth.”

Tex Gunning, CEO of TNT Express, added: “This offer comes at a time of important transformations within TNT Express and we were fully geared to executing our stand-alone strategy. But while we did not solicit an acquisition, we truly believe that FedEx’s proposal, both from a financial and a non-financial view is good news for all stakeholders.

“Our people and customers can profit from the true global reach and expanded propositions, while with this offer our shareholders can already reap benefits today that otherwise would only have been available in the longer run.”

Images: FedEx and TNT Express